I finally found how the hacker got in. I have probably 30 mac and idevices, but only 10 that were associated with this AppleID. I forgot about a headless mac mini that I have running time machine (encrypted) backups in a closet. I had an external port forwarded for VNC (stupid I know). They were able to log in to that computer (my password was random, but only 6 characters). They changed the computer password, but I was able to log into a different administrator's account and regain control of the computer. Thankfully, that computer didn't really have any useful info on it. Open on the desktop were Keychain, a web browser with PayPal, Ebay, some Chinese eBay like site and another financial page. I don't keep any log in info for things like that in keychain and have never even been to those sites on that computer. I also have 2FA (SMS thank goodness) for both. So I removed the forwarded port and will obviously only be VPNing into that site when I want to screen share from now on.
So, the breach was a weakness in my architecture. Having said that, I really don't like Apple's implementation of 2FA. Its convenient when you don't have your phone around, but have another device close and you need to authenticate, but I'd prefer old fashioned SMS to a single cell phone or device. I realize that the pop-ups for confirming changes to the account go away from devices once one clicks an option and thus it would be pretty easy for the hacker to quickly press "yes" or whatever and not have me see any pop up on my phone. I think this is also a weakness. I don't know how much I could have done about it anyway. It all happened within a minute with just emails to my phone as evidence of what was happening.
Unfortunately, knowing how this happened and mitigating further damage still doesn't help me regain control of the account. I need the phone number that the hacker put on the account to do anything. I've submitted feedback to apple per their engineer's suggestion, but I won't be holding my breath for a fix any time soon.
I also can't sign out of "find my phone" on my iPhone or iPads without the password meaning that the hacker could erase my devices at any time if they are so inclined. So I've got that going for me....